Blueprint (draft) ISO 20022 for Eurozone High Value ...

Blueprint (draft)

ISO 20022 for Eurozone

High Value Payments with

cross-border leg

November 2021 – end 2022

May 2020

Blueprint

Background

• In September 2018, SWIFT announced a plan to facilitate a community migration of cross-border payments

traffic from the MT standard to ISO 20022, starting in November 2021 and running for four years, to 2025.

• The start date coincided with the ‘big bang’ migration of Eurozone high-value payment systems - TARGET2 and

EURO1 - to full ISO 20022.

• At its March 2020 meeting the SWIFT Board supported a change to SWIFT’s approach to ISO 20022 for cross-

border payments, introducing a new platform concept that aims to reduce the cost and complexity of

implementation for end-users and accelerate realization of the benefits of the standard.

• To allow time for the new platform to be implemented, the start of cross-border migration was postponed by one

year, to end 2022 (although the overall end-date for migration remains 2025). SWIFT MT will remain the default

standard for cross-border payments until end 2022.

• This change of timeline introduces a data truncation issue for Eurozone HVPS participants that operate as

intermediaries in transactions with a cross-border ‘leg out’, during the period November 2021 to November

2022.

• Working closely with the European Central Bank and the Eurozone banking community, SWIFT plans a series

of measures to ensure data compatibility between ISO 20022 and MT messages as Eurozone financial

institutions migrate to the new standard.

• This Blueprint explains the measures and associated deliverables, timeline and customer impact.

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Blueprint

Summary of measures

1. Usage Guidelines, for sending EUR payments originating in TARGET2 and EURO1 with a cross-

border ‘leg-out’, that ensure data used to populate the payment can be transported using the MT

standard without truncation.

Usage guidelines will be published alongside an on-line test portal that will enable users to test that

messages comply.

2. Validation software, licensed free of charge for the period of coexistence before the new platform is

available (November 2021 to end 2022) that can be used to check at runtime that an ISO 20022

message conforms to the guidelines described above.

3. Translation software, licensed free of charge for the period of coexistence before the new platform

is available (November 2021 to end 2022) that can be used by intermediary EUR HVP participants to

translate from ISO 20022 payment messages to MT for the cross-border leg of ‘leg-out’ payments.

4. ISO 20022 network service, to enable users that have agreed bilaterally to use ISO 20022 for

payments and cash reporting to do so on an opt-in basis using the FINplus SWIFTNet InterAct Store

& Forward service.

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Blueprint

1. Market Practice Guidelines for EUR High-Value Payments with cross-border leg

November 2021-end 2022

A series of market practice guidelines for Eurozone HVP participants formulated by a working group representing six

European banks, ECB, 4CB and EBA Clearing. The group is open to observers from the European banking

community on an opt-in basis.

These guidelines will apply from November 2021 to end 2022.

The guidelines apply to EUR payments originating in or leaving TARGET2 and EURO1 that feature a cross-border

leg. They ensure that data used to populate the transaction can be transported using the MT standard without

truncation. Full details will be available on the MyStandards platform from 30th June 2020, alongside an online test

portal to allow users to verify compliance with the guidelines:

• A single set of Usage Guidelines will be delivered for both TARGET2 and EURO1 transactions;

• These guidelines will cover leg-out and intra HVPS payments;

• For completeness, leg-in transactions are also covered, although this requirement is not triggered by the delay in

implementation of cross-border ISO 20022 (see Annex);

• Existing enriched TARGET2/EURO1 guidelines will not be impacted. The new guidelines will be subsets of

guidelines published for TARGET2 and EURO1, which will apply from end 2022.

Scenarios in scope are illustrated in the following slides.

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Blueprint



1.1 Leg-out pacs.008

Message Flow:

The Debtor Agent (direct participant) submits a restricted pacs.008 to the Intermediary (direct participant)

through TARGET2/EURO1

The Intermediary translates the pacs.008 into an MT 103 and sends it to the Creditor Agent.

Deliverables:

Usage guideline for the pacs.008

Translation rules from the pacs.008 to MT 103

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Blueprint



1.2 Leg-out pacs.009

Message Flow:

The Debtor (direct participant) submits a restricted pacs.009 to the Creditor Agent (direct participant)

through TARGET2/EURO1

The Creditor Agent translates the pacs.009 into an MT 202 and sends it to the Creditor

Deliverables:


Translation rules from the pacs.009 to MT 202

CreditorCreditor Agent

T2 DP

Debtor

T2 DP

MX MX MT

1. pacs.009.001.08

CORE

2. MT 202

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Blueprint



Message Flow:

The Debtor Agent sends an MT 103 to the Creditor Agent which needs to be covered through a pacs.009 COV;

The Debtor Agents then initiates the cover through its Correspondent (direct participant)

The Sender’s Correspondent (direct participant) sends a pacs.009 COV to the Receiver’s Correspondent through TARGET2/EURO1

The Receiver’s Correspondent translates the pacs.009 COV into an MT 202 COV and sends it to the Intermediary, for

further processing to the Creditor Agent.

Deliverables:

Usage guideline for the pacs.009 COV

Translation rules from the pacs.009 COV to MT 202 COV.

1.3 Leg-out pacs.009 COV

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CreditorDebtorCreditor

Debtor

1. Deliverables summary

Blueprint

Leg-Out

MX MT Comment

pacs.008 MT 103 • Usage Guideline for pacs.008

• Translation rules from pacs.008 to MT 103

pacs.009 MT 202/MT 202 COV • Usage Guideline (covering COV and ‘core’ pacs.009)


• Translation rules from pacs.009 COV to MT 202 COV

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Blueprint

2. Validation of Market Practice Guidelines for EUR High-Value Payments with cross-border leg


SWIFT will provide validation software (based on its Translator product) that can be used in a production

environment to check that ISO 20022 messages conform to the guidelines described in [1].

A runtime license for this software will be available free of charge for the period between the November

2021 go-live of TARGET2 (and EURO1) and the availability of the new SWIFT platform end 2022.

Technically, the runtime software is a Java library that can be embedded in an application or exposed as a

micro-service.

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Blueprint

3. Translation of ISO 20022 to MT for EUR High-Value Payments with cross-border leg


SWIFT will provide translation software that can be used by HVP system members to translate from ISO

20022 payment messages to MT for leg-out payments

A runtime license for this software will be available free of charge for the period between the November

2021 go-live of TARGET2 (and EURO1) and the availability of the new SWIFT platform end 2022.

Technically, the runtime software is a Java library that can be embedded in an application or exposed as a

micro-service.

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Blueprint

4. ISO 20022 Network Service

November 2021-end 2022 (if clear demand from participants)

Enables users that have agreed bilaterally to use ISO 20022 for payments and cash reporting to do so an opt-in basis

using the FINplus SWIFTNet InterAct Store & Forward messaging service

Supports

• All CBPR+ usage guidelines published on MyStandards

• Message validation based on CBPR+ usage guidelines

• gpi tracking of pacs.008 / pacs.009 COV / pacs.009 CORE / pacs.002 / pacs.004 message types

• Universal gpi confirmation using new XML TRCK message types

• RMA

Does not provide in-flow translation services or replicate RMA from FIN

Pilot messaging service available Nov 2020, with gpi tracking of pacs.008 / pacs.009 COV early March 2021 & tracking

of pacs.009 CORE / pacs.002 / pacs.004 July 2021

Live messaging service available Nov 2021

Supported by Alliance Access 7.4.50 & 7.5, and AMH 4.1

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https://www2.swift.com/mystandards/#/c/cbpr/landing

ISO 20022 for Eurozone High Value Payments

Q1 2020 Q2 2020 Q3 2020 Q4 2020

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Preparation of Usage

Guidelines [1]

Publication of Usage

Guidelines [1]

Availability of validation

and translation software

[2 + 3]

Deliverables Timeline

Blueprint

Pilot (test)

FINplus

messaging

service available

for payments [4]

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Blueprint

Bank Implementation Timeline

ISO 20022 for Eurozone High Value Payments

2020 2021 2022 2023

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

HVPS testing

Full ISO 20022 for HVPS and cross-border (CBPR+)

SWIFT Transaction

Management Platform (TMP)

testing

HVPS testing

starts

TARGET2, EURO1 &

FINplus service live

SWIFT TMP live*SWIFT TMP testing

starts*

Usage guidelines for HVPS in production

Translation and MT for cross-border

*Provisional dates

FINplus pilot (test)

service live

Review

usage

guidelines

Implement usage guidelines

FINplus testing

Publication of Usage

Guidelines

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Blueprint

Annex

Leg-in scenarios

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Blueprint

A. Market Practice Guidelines for EUR High-Value Payments with cross-border leg

November 2021- end 2022

1.4 Leg-in MT 103

Message Flow:

The Debtor Agent sends an MT 103 to the Intermediary (direct participant)

The Intermediary (direct participant) translates the MT 103 into a restricted pacs.008 and sends it to

TARGET2/EURO1 for further processing by the Creditor Agent (direct participant)

Deliverables:

Usage guideline for pacs.008

Translation rules from MT 103 to pacs.008

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Debtor Creditor

Blueprint



1.5 Leg-in MT 202

Message Flow:

The Debtor sends an MT 2020 to the Creditor Agent (direct participant)

The Creditor Agent translates the MT 202 into a restricted pacs.009 message and sends it to TARGET2/EURO1

for credit on the Creditor Account.

Deliverables:


Translation rules from MT 202 to pacs.009

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1.6 Leg-in MT 202 COV:

Message Flow:

The Debtor Agent sends an MT 103 to the Creditor Agent which needs to be covered through a pacs.009 COV

The Debtor Agents sends an MT 202 COV to its correspondent (direct participant)

The Sender’s Correspondent translates the MT 202 COV into a restricted pacs.009 message and sends it to

TARGET2/EURO1 for further processing through the Receiver’s Correspondent (direct participant)

Deliverables:


Translation rules from MT 202 COV to pacs.009

Blueprint 17

Leg-In

MT MX Comment

MT 103 pacs.008 • Usage Guidelines for pacs.008

• Translation rules from MT 103 to pacs.008

MT 202/MT 202 COV pacs.009 • Usage Guideline (covering COV and ‘core’ pacs.009)


• Translation rules from pacs.009 COV to MT 202 COV

A. Deliverables summary


Blueprint 18

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